Fraud – concealing a fact or misleading, to induce someone(s) to part with property or surrender a legal right

1. Deceit, deception, artifice, or trickery operating prejudicially on the rights of another, and so intended, by inducing him to part with property or surrender some legal right. 23 Am J2d Fraud § 2.

Anything calculated to deceive another to his prejudice and accomplishing the purpose, whether it be an act, a word, silence, the suppression of the truth, or other device contrary to the plain rules of common honesty.23 Am J 2d Fraud § 2.

An affirmation of a fact rather than a promise or statement of intent to do something in the future.Miller v Sutliff, 241 I11 521, 89 NE 651.

For the purpose of the exception to discharge in bankruptcy of debts incurred by officers and fiduciaries through “fraud”: — positive fraud, fraud in fact, involving moral turpitude or intentional wrong.9 Am J2d Bankr § 801.

1. Deceit, deception, or trickery that is intended to induce, and does induce another to part with anything of value or surrender some legal right. [2]

1. A knowing misrepresentation or knowing concealment of a material fact made to induce another to act to his or her detriment. Fraud is usually atort, but in some cases (especially when the conduct is willful) may be a crime. — aka intentional fraud. [3]

“Fraud has been defined to be any kind of artifice by which another is deceived. Hence, all surprise, trick, cunning, dissembling, & other unfair way that is used to cheat any one, is to be considered as fraud.” [4]

fraud: (additional definitions)

2. A reckless misrepresentation made without justified belief in its truth to induce another person to act.

3. Atortarising from a knowing or reckless misrepresentation or concealment of a material fact made to induce another to act to his or her detriment.Additional elements in a claim for fraud may include reasonable reliance on the misrepresentation and damages resulting from this reliance.

4. Unconscionable dealing;especially, in contract law, the unfair use of power arising out of the parties’ relativepositions & resulting in an unconscionable bargain. —fraudulent, adj. [3]

“The use of the term fraud has been wider & less precise in the chancery than in the common-law courts. This followed necessarily from the remedies which they respectively administered. Common law gave damages for a wrong, & was compelled to define with care the wrong which furnished a cause of action. Equity refused specific performance of a contract, or set aside a transaction, or gave compensation where one party had acted unfairly by the other. Thus ‘fraud’ as common law is a false statement… : fraud in equity has often been used as meaning unconscientious dealing — ‘although, I think, unfortunately’, a great equity lawyer has said.” [5]

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Note: Fraud cases often involve unjust enrichment, and sometimes are cases of conspiracy.:

conspiracy– an agreement by two or more persons to commit an unlawful act, coupled with an intent to achieve the agreement’s objective, including any action or conduct that furthers the agreement. — aka criminal conspiracy.

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Relative Terms:

defraud– vb. (14c.) To cause injury or loss to (a person or organization) by deceit; to trick (a person or organization) in order to get money.

badges of fraud– suspicious circumstances that indicate the possibility of fraud.

statute of frauds – a statute (based on the English Statute of Frauds) designed to prevent fraud and perjury by requiring certain contracts to be in writing and signed by the party to be charged.

Types of Fraud
by Category:

actual fraud – a concealment or false representation through an intentional or reckless statement or conduct that injures another who relies on it in acting. — aka fraud in fact; positive fraud; moral fraud.

advance-fee fraud – wherein the victim is persuaded by the perpetrator to pay “fees” in anticipation of receiving a much larger benefit that is ultimately never delivered.— aka 419 fraud.

affinity fraud – a fraud in which the perpetrator tailors the fraud to target members of a particular group united by common traits or interests that produce inherent trust. When a religious group is targeted, it is usually called religious-affinity fraud.

bank fraud – knowingly attempting to execute a scheme or artifice to defraud a financial institution, or to obtain property owned by or under the custody or control of a financial institution, by false or fraudulent pretenses, representations, or promises. 18 U.S.C. § 1344.

consumer fraud – Any intentional deception, deceptive act or practice, false pretense, false promise, or misrepresentation made by a seller or advertiser of goods or services to induce the customer(s) to buy.

fraudulent conversion – an essential element of the crime of embezzlement, an appropriation of money or other property to one’s personal use after obtaining lawful possession of it, or of using it for the benefit of anyone other than its owner.

conspiracy– an agreement by two or more persons to commit an unlawful act, coupled with an intent to achieve the agreement’s objective, including any action or conduct that furthers the agreement. — akacriminal conspiracy.

civil fraud – (18c) 1. FRAUD (3). 2.Tax. An intentional — but not willful — evasion of taxes. of the distinction between an intentional (i.e., civil) and willful (i.e., criminal) fraud is not always clear, but civil fraud carries only a monetary, noncriminal penalty. [1] 1. Tax evasion which is intentional but not willful. [3]

tax fraud – See TAX EVASION. [1] 1. The crime of tax evasion. Tax evasion which is intentional but not willful is a civil fraud.

tax evasion – Willfully avoiding payment of taxes legally due, for EXAMPLE: fraudulently concealing or understating one’s income. Tax evasion is also referred to as tax fraud, and is a felony.

click fraud – (2005) A scheme in which a person or robot repeatedly clicks on a merchant’s pay-per-click advertisement on a website for purposes other than viewing the website or making a purchase.

affiliate click fraud – (2006) Click fraud committed by a third party who agrees to host the ad in exchange for payment based on the number of clicks.

competitor click fraud – (2006) Click fraud committed by a business’s competitor in order to increase the amount of money the advertising merchant must pay to the site hosting the ad.

criminal fraud – (18c) Fraud that is illegal by statute and may subject an offender to criminal penalties such as fines and imprisonment. * An example is the willful evasion of taxes accomplished by filing a fraudulent tax return. Cf. civil fraud; larceny by trick under LARCENY.

fraud in the factum – (1848) 1. Fraud occurring when a legal instrument is actually executed differs from the one intended for execution by the person who executes it, or when the instrument may have had no legal existence. * Compared to fraud in the inducement, fraud in the factum occurs only rarely, as when a blind person signs a mortgage when misleadingly told that the paper is just a letter. — aka fraud in the execution; fraud in the making. 2.Criminal law. In the law of rape, misrepresentation about the nature of the act of penetration, whereby the other party’s consent is nullified and the actor becomes criminally responsible. * For example, a doctor who secures his patient’s consent to his inserting an object into her vagina commits fraud in factum, and is thus guilty of rape, if he has represented that the object will be a medical instrument but is instead his sexual organ. Cf. fraud in the inducement.

fraud on the community – (1946) Family law. In a community-property state, the deliberate hiding or fraudulent transfer of community assets before a divorce or death for the purpose of preventing the other spouse from claiming a half interest owners in the property.

fraud on the court – (1810) In a judicial proceeding, a lawyer’s or party’s misconduct so serious that it undermines or is intended to undermine the integrity of the proceeding. * Examples are bribery of a juror and introduction of fabricated evidence.

fraud on the market – (1893) 1. Fraud that occurs when an issuer of securities gives out misinformation that affects the market price of stock, effectively misleading people who buy or sell even though they did not rely on the statement itself or on anything derived from it other than the market price. 2. The securities-law claim based on such fraud.

fraud-on-the-market principle – (1994) Securities. The doctrine that, in a claim under the antifraud provisions of the federal securities laws, a plaintiff may presumptively establish reliance on a misstatement about a security’s value -without proving actual knowledge of the fraudulent statement — if the stock is purchased in an open and developed securities market. * This doctrine recognizes that the market price of an issuer’s stock reflects all avail‘ able public information. The presumption is rebuttable. — aka fraud-on-the-market theory.

fraud on the Patent Office – (1865) Patents. A defense in a patent-infringement action, attacking the validity of the patent on the grounds that the patentee gave the examiner false or misleading information or Withheld relevant information that the examiner would have considered important in considering patentability. * The scope of prohibited acts is wider than that covered by common-law fraud, and today the defense is generally called “inequitable conduct before the PTO.” If the defense is established, the entire patent is rendered unenforceable. See defense of inequitable conduct under DEFENSE (1).

healthcare fraud – A healthcare provider’s false statement or misrepresentation made in order to claim a higher payment for healthcare services than the provider is actually entitled to. — aka (specif) Medicaid fraud; Medicare fraud.

hidden fraud – See fraudulent concealment under CONCEALMENT.

identity fraud – See IDENTITY THEFT.

insurance fraud – (1877) Fraud committed against an insurer, as when an insured lies on a policy application or fabricates a claim.

intrinsic fraud – (1832) Fraud that pertains to an issue involved in a judicial proceeding. * Examples include the use of fabricated evidence, perjured testimony, and false receipts or other commercial documents. Cf. extrinsic fraud; legal fraud. See fraud in law. [3]

1. Fraud committed in the trial of a case or with respect to an issue involved in the case. EXAMPLES: perjury; bribing a witness; forging an exhibit. 2. Fraud in the inducement. [2]

fraud in the inducement – (1831) 1. Fraud occurring when a misrepresentation leads another to enter into a transaction with a false impression of the risks, duties, or obligations involved; an intentional misrepresentation of a material risk or duty reasonably relied on, thereby injuring the other party without vitiating the contract itself, especially about a fact relating to value or the ability to performs. — aka fraud m the procurement. 2.Criminal law. Misrepresentation designed to elicit a person s consent to sexual activity but not concerning the nature of the activity itself, and therefore deemed not to vitiate any consent thereby secured. * For example, a man who secures a. woman’s consent to sexual intercourse after claiming, falsely, that he is a theatrical agent or that he wishes to marry her, commits fraud in the inducement, not fraud in the factum, and therefore has not committed the offense of rape. The factum-inducement distinction has proved difficult to apply in borderline cases and has been abandoned in most modern criminal codes, Cf. fraud in the factum. [3] Fraud exercised in inducing the Slg‘ung of an instrument. Gomillion v Forsythe, 218 SC 211, 62 SE2d 297, 53 ALR2d 169. [1]

1. Fraud exercised in inducing a person to sign an instrument or to enter into an agreement or transaction. [2]

long-firm fraud – (1930) The act of obtaining goods or money on credit by falsely posing as an established business and having no intent to pay for the goods or repay the loan.

passport fraud – See PASSPORT FRAUD.

promissory fraud – (1934) A promise to perform made when the promisor had no intention of performing the promise. — aka common-law fraud.

wire fraud – (1955) An act of fraud using electronic communications, as by making false representations on the telephone to obtain money. * The federal Wire Fraud Act provides that any artifice to defraud by means of wire or other electronic communications (such as radio or television) in foreign or interstate commerce is a crime. 18 USCA § 1343. [3]

wirefraud – The use of interstate telephone or telegraph lines to perpetrate a fraud. Wirefraud is federal crime. See also mail fraud. [2]

fraudare –vb. [Latin] Roman law. To defraud.

fraud by hindsight – (1941) Securities. A claim of fraud based on the assumption that a corporation deliberately misled investors by issuing optimistic financial statements or forecasts and later reporting worse-than-expected results. * Suits for fraud by hindsight were common in the early 19905. Congress eliminated this claim in the Private Securities Litigation Reform Act of 1995. 15 USCA §§ 78u-4(b).

fraud on the power – (1828) Wills & estates. An appointment of a power made in favor of a permissible appointee but ineffective because the donee’s purpose is to benefit an impermissible appointee.

fraudulent alienation – (17c) 1. The transfer of an interest in property with an intent to defraud others, especially creditors and lienholders. See FRAUDULENT CONVEYANCE (1). 2. The transfer of an estate asset by the estate’s administrator for little or no consideration.

fraudulent alienee – See ALIENEE.

fraudulent banking – (1890) The receipt of a deposit by a banker who knows at the time of the deposit that the bank is insolvent.

fraudulent claim – 1. A claim for any benefit or payment based on a fraudulent misrepresentation. 2. A false insurance claim.

fraudulent concealment – See CONCEALMENT.

fraudulent-concealment rule – See CONCEALMENT RULE.

fraudulent conveyance – (17c) 1. A transfer of an interest in property for little or no consideration, made for the purpose of hindering or delaying a creditor by putting the property beyond the creditor’s reach; a transaction by which the owner of real or personal property seeks to place the property beyond the reach of creditors. — aka conveyance in fraud of creditors; fraud on creditors. [3]

“With respect to the general power which is exercisable by deed, it seems that the principle that the donee’s creditors can reach the property subject to the exercised general power will have application only to the so-called fraudulent conveyance. That is to say, if the owned assets of the donee after the donative inter vivos exercise are sufficient to satisfy the creditors, then the exercise of the power will not subject the appointive property to the claims of the creditors; if, on the other hand, the owned assets of the donee are inadequate to satisfy creditors’ claims after the exercise of the power, then the transfer resulting from the exercise is likely to fall into the category of the fraudulent conveyance and the creditors will be able to reach the appointive property in the hands of the appointee.” [7]

2.Bankruptcy. A prebankruptcy transfer or obligation made or incurred by a debtor for little or no consideration or with the actual intent to hinder, delay. or defraud a creditor. * A bankruptcy trustee may recover such a conveyance from the transferee if the requirements of 11 USCA § 548 are met. — aka fraudulent transfer: Cf. PREFERENTIAL TRANSFER. [3]

1. A conveyance in fraud of creditors. A transaction by means of which the owner of real or personal property has sought to place the land or goods beyond the reach of his creditors, or which operates to the prejudice of their legal or equitable rights, or a conveyance which operates to the prejudice of the legal or equitable rights of other persons, including subsequent purchasers. 37 Am 12d Frd Conv § 1. — aka fraud of creditors. See Bulk Sales Acts; fraudulent transfer. [1]

1. A conveyance in fraud of creditors; a transaction by means of which the owner of real or personal property attempts to put the property beyond the reach of his creditors. — aka fraudulent disposition; fraudulent sale. [2]

fraudulent assignment – An assignment for the benefit of creditors made with intent to prevent the immediate application of the property to the payment of assignor’s debts. 6 Am J2d Assign for Crs § 63.

fraudulent transfer – A transfer voidable in bankruptcy because made with actual intent to hinder, delay, or defraud existing or future creditors, or a transfer fraudulent In law, without reference to an actual fraudulent intent on the part of the bankrupt, because of the insolvency of the bankrupt at the time of the transfer and the absence of a fair consideration. 9 Am 12d Bankr § 1115. See fraudulent conveyance. [1]

fraus legis – [Latin “fraud on the law”] (1879) Roman law. Evasion of the law; specifically, doing something that is not expressly forbidden by statute, but that the law does not want done.

fraud in equity – A conception of fraud which includes whatever amounts to actionable fraud in law and other acts, transactions, and circumstances, wherein it appears that one person has obtained an unconscionable advantage over another, from which equity conceives the existence of a constructive fraud. Gierth v Fidelity Trust Co. 93 NJ Equity 163, 115 A 397, 18 ALR 976.

fraud or dishonesty – As a phrase expressive of the undertaking of the surety in a fidelity bond:—acts extending beyond those which are criminal; a phrase inclusive under a broad construction against a paid surety of acts and circumstances whereby loss is caused the obligee, even though not such as would support a criminal prosecution. Prior Lake State Bank v National Surety Corp. 248 Minn 383, 80 NW2d 612, S7 ALR2d 1306.

fraudulent concealment – The suppression of, or silence concerning, a fact material to be known and which the party is under a duty to communicate because of a confidential relationship between the parties or the particular circumstances of the case. American Nat. Bank v Fidelity & Deposit Co. 131 Ga 854, 63 SE 622. As a bar to discharge in bankruptcy: — the failure of the bankrupt to disclose his property to his trustee in bankruptcy after having had reasonable Opportunity so to do. 9 Am 12d Bankr § 695. As a criminal offense against the Bankruptcy Act: — knowingly to conceal from the receiver, custodian, trustee, marshal, or other officer of the court charged with the custody or control of property, or from creditors in any proceeding under the Bankruptcy Act, any property belonging to the estate of a bankrupt; to conceal property knowingly, in contemplation of a bankruptcy proceeding, with intent to defeat the bankruptcy law. 18 USC § 152, paragraphs (l),(6). [1]

1. Suppressing or hiding a material fact that one has a duty to communicate. EXAMPLE: the failure of a bankrupt to fully disclose her property to her trustee in bankruptcy. [2]

fraudulent contract of marriage – A ground of absolute divorce consisting of fraud perpetrated upon the plaintiff in inducing him or her to enter into a marriage which is void because of consanguinity, imbecility, or other circumstance rendering the marriage void from the beginning. Gould v Gould, 74 Conn 242, 61 A 604.

fraudulent disposition of property – A disposition of property with respect to which three things must concur: — first, the thing disposed of must be of value, out of which the creditor could have realized all, or a portion of his claim; second, it must be transferred or disposed or by the debtor, and. third, it must be done with intent to defraud. Hoyt v Godfrey, 88 NY 669, 670.

fraudulent-enlistment or appointment – The procuring of one’s own enlistment or appointment in the armed forces by false representations or deliberate concealment as to his qualifications for the enlistment of appointment and receiving pay or allowances thereunder. 10 USC § 883. The effecting by one person of an enlistment or appointment in the armed forces of one known by him to be ineligible for such enlistment or appointment. l0 USC § 884.

fraudulent exchange – An exchange of pr0perty fraudulent as to the creditors of one of the parties. 37 Am 12d Frd Conv § 59.

fraudulent joinder – A plaintiff’s joinder of a resident of the state as a party defendant without the right to do so and in bad faith, but in order to prevent a removal of the cause to the federal court.Good v Hartford Acci. & Indem. Co. (DC SC) 39 F Supp 475.

fraudulently – Acting with a deliberately-planned purpose and intent to deceive and thereby to gain an unlawful advantage. Bank of Montreal v Thayer (CC Iowa) 7 F 622, 625. A word insufficient in itself as an allegation of fraud, a sufficient allegation being nothing less than a statement of the fraudulent conduct. Garst v Hall & Lyon Co. 179 Mass 588, 61 NE 219.

fraudulent mortgage – A mortgage fraudulent as to the creditors of the mortgagor. 37 Am J2d Frd Conv § 58.

fraudulent practice – Literally, the practice of fraud-that is, fraudulent conduct. In reference to conduct proscribed by a Blue Sky Law, all acts which have a tendency to deceive or mislead the purchasing public, whether or not they originate in an actual evil design or contrivance to perpetrate fraud or do injury to the rights of another person. People v Federated Radio Corp. 244 NY 33, 154 NE 65. [1]

1. Fraudulent conduct. [2]

fraudulent preference – Giving a creditor an undue advantage over other creditors in securing his agreement to a composition. 15 Am J2d Comp Cred § 8. The act of a debtor in preferring one of his creditors by making payment to him with intent thereby to hinder, delay, or defraud other creditors. 37 Am J2d Frd Conv §§ 87 et seq. A preferential transfer voidable under the Bankruptcy Act is not necessarily fraudulent. In the actual cases, however, a purpose to prefer, which is usually aimed at benefiting relatives or business associates, is important for consideration in determining whether there was also a purpose to defraud. Van Iderstine v National Discount Co. 227 US 575, 57 L Ed 652, 33 S Ct 343. [1]

1. The act of a debtor in making payment to one of her creditors by paying him with the intention of defrauding other creditors. 2. Under the Bankruptcy Code, a transfer of property to a creditor which gives him an advantage over other creditors. Although such a transfer may be disallowed by the trustee in bankruptcy, it is not necessarily a criminal act.
See preference. [2]

fraudulent representation – words spoken or written with the knowledge or belief that they are false, and with the purpose of deceiving and inducing action in reliance. — aka false representation; misrepresentation; fraudulent misrepresentation.

mail fraud – using the U.S. Postal Service (or other mailing system) to make false representations in order to obtain money or anything else of value. — aka using the mails to defraud.

fraud order – An order by the Postmaster General directing the return of mail to the sender upon finding that the addressee is engaged in conducting prohibited schemes, enterprises, or devices. 41 Am J1st P 0 § 97.

deceit – a species of fraud; any false representation or contrivance whereby one person overreaches and misleads another to the hurt of the latter. Walter v State, 208 Ind 231, 195 NE 268, 98 ALR 607. [1]

fraudulent separation – The procuring of one’s own separation from the armed forces by false representations or deliberate concealment as to his eligibility for separation. 10 USC § 883. The effecting by one person of the separation of another from the armed forces, knowing the latter to be ineligible for separation. 10 USC § 884.

fraudulent use of process – A form of abuse of process; the use of legal process for a fraudulent purpose, as by attempting to enforce a judgment on a fictitious claim or the use of legal process as a mere cover for the creditors in obtaining property of the defendant in order to put it to their own use. 1 Am J2d Abuse P §§ 9-12.

in fraudum legis– in fraud of the law. — aka fraudum legis. [1]

fraud in the essence – Deception with respect to a document a person signs. EXAMPLE: a sale based upon a fraudulent misrepresentation. — aka fraud in the factum.
See essence. [2]